The former-producing Steenkampskraal Mine is located approximately 70 kilometers north of the town of Vanrhynsdorp in the Western Cape Province of South Africa and approximately 350 kilometers north of Cape Town. The mine is held by Steenkampskraal Monazite Mine (Pty) Limited ("SMM"), a 74%-owned subsidiary of Rare Earth Extraction Co. Ltd. ("Rareco") of Stellenbosch, South Africa. Rareco is a 100%-owned subsidiary of GWMG.
As a result of being in operation previously, the infrastructure at, and around, the mine site is excellent with access to the site by paved and gravel roads. It is also in close proximity to rail and sea-port. In addition, access to power will be provided through the extension of the existing electrical grid to the site. Diesel generators will be used for backup power.
The South African government as well as the Western Cape and local municipal governments have proven, throughout all discussions and negotiations, to be pro-development. Despite a number of media headlines that hint at the potential for disruptions to the favourable nature of the political climate, all interaction between GWMG and the national and regional governments has been very positive in nature.
In the course of putting the Steenkampskraal mine into production, GMWG will be engaged in remediation of the minesite, cleaning up contamination left from the period when Steenkampskraal was operated as a monazite mining operation, producing monazite concentrate which was then shipped elsewhere mainly for thorium recovery.
In June 2010, SMM was awarded a Converted Mining Right permitting mining operations for a 20-year period. Also of significance is the Nuclear Authorization held by the Steenkampskraal site for the handling of radioactive material including the storage of thorium. This is, to best of GWMG management’s knowledge, unique in South Africa. The ability to store thorium in casements, back underground in a recoverable form, will be of clear benefit in dealing with the thorium as it is removed in the processing stage at site. GWMG plans to investigate the potential to access monazite from tailings of other types of mining operations. The monazite could be processed at Steenkampskraal with the thorium inherent in these types of tailings stored at the Steenkampskraal site. The companies from which the tailings will be obtained have, in the opinion of GWMG management, no other available alternatives for such storage. This could create a compelling reason for them to enter into an agreement with GWMG for the processing of their monazite, hereby potentially creates access to additional monazite supply for GWMG.increasing rare earth production at Steenkampskraal.
The Steenkampskraal mine originally operated through a subsidiary company of Anglo American Corporation from 1952 to 1963, making a monazite concentrate that was sold mostly for its thorium content. However, Steenkampskraal monazite was also processed in the US, producing the full suite of rare earth elements, including heavy rare earth products. In 1989, Rareco acquired the mine with the intention of becoming a rare earth elements producer. However, the fundamentals for the REE sector deteriorated significantly during that time, as China took control of the global rare earth industry, and mining became less attractive than in the current environment. Therefore, the operation was put on hold until recently.
Independent review of the project was conducted by Dr Felix Mendelsohn in 1996, at the request of Rareco. These independent resource estimates indicate a recoverable resource of approximately 30,000 tonnes TREO, including rock already broken in underground stopes, and stockpiled on surface, as outlined in the table below.
It is important to note that the independently developed data does not represent an NI-43-101 compliant reserve or resource. As such, a Qualified Person has not done sufficient work to establish any mineral resource, and this data should not be relied upon to assume any NI-43-101 compliant reserve or resource. GWMG is treating this data as a guideline only for developing the work programs necessary to bring results into compliance with NI 43-101.
Historic underground mining operations deposited run-of-mine waste rock on the surface of the property in addition to tailings from the processing plant. Sample grades of the tailings and waste rock indicate that historically both would qualify as resource tonnages for rare earth production. In addition to the remaining in-situ material, is rock that was blasted but not hauled to surface. Some of this rock was historically considered as low grade material and was used as ballast for the underground railroad track used to support the mined rock being hauled to surface.
Another positive attribute of a mining operation at Steenkampskraal, is that the thorium content (with an historic in-situ grade of 2.5%. note: not NI 43-101-compliant) may provide an attractive byproduct from the operation. Rareco has received expressions of interest from third parties in recovering the thorium from the operation. Using existing proven technology, Rareco believes that it can extract the thorium during the production of the final mixed rare earth chloride concentrate to meet any customer and environmental requirements. According to current plans, the extracted thorium will be mixed with concrete and stored in designated areas within the underground mine. The thorium can then potentially be recovered through an acid digestion process if, as and when required.
GWMG, through its wholly owned subsidiary Rareco, has focused its attention on the refurbishment and the planned re-commissioning of the Steenkampskraal mining operation. A series of development steps have begun to transform this brownfield project toward full operations.
The most pertinent highlights of the development process over the past two years include the following (Full list of news releases and details)